Driving licence fees are to fall, with larger reductions for those who carry out online transactions, the Government has announced.

The plans, which are to be consulted on, envisage drivers who apply online for their first driving licence would see the fee drop from £50 to £34.

Drivers who renew their licence after 10 years would see the fee drop from £20 to £14. The online reduction is 32% and the paper application reduction is 15%.

Chief Secretary to the Treasury Danny Alexander said: "I have been working hard to drive savings across the whole public sector and it's great to see the benefit of these efficiencies feed through to drivers and businesses' pockets. What the DVLA (Driver and Vehicle Licensing Agency) have shown today is that you can do more for less."

Transport Minister Claire Perry said: "The cost of driving can be significant, especially for new drivers. I'm pleased to say that we are planning to save drivers £18 million a year by cutting licence fees, thanks to the DVLA making significant savings to their running costs."

The DVLA is currently reviewing all the fees they charge to motorists and the consultation launched today is the first step in this ongoing review.

The consultation closes on August 25 2014 and the Government is hoping to introduce the new fees by the end of October 2014.